Robustness test approach combining binary sample splitting and system of equations methods

MA Jian, HU Yi, LIU Jinquan

Systems Engineering - Theory & Practice ›› 2020, Vol. 40 ›› Issue (6) : 1371-1381.

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Systems Engineering - Theory & Practice ›› 2020, Vol. 40 ›› Issue (6) : 1371-1381. DOI: 10.12011/1000-6788-2020-0432-11

Robustness test approach combining binary sample splitting and system of equations methods

  • MA Jian1, HU Yi2,3, LIU Jinquan1
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Abstract

This article proposes a novel robustness test method which combines binary sample splitting and system of equations techniques. First, we build a structural model to analyze relationship between the conditional exogeneity assumption and the explanations of structural parameters, thus establish principles of construction of alternative models. Then, we propose two construction methods:Binary sample splitting and confounding variables adjusting. Finally, we propose a robustness test statistic which based on system of equations method. Furthermore, we adjust computation process of the test to avoid singularity issue. Our Monte Carlo experiments verify the finite sample properties of this robustness test. As an application, we analyze the model settings of an article by Professor Acemoglu, which studied the influence of aging on economic growth.

Key words

structural equation model / robustness / binary sample splitting / system of equations / singularity

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MA Jian , HU Yi , LIU Jinquan. Robustness test approach combining binary sample splitting and system of equations methods. Systems Engineering - Theory & Practice, 2020, 40(6): 1371-1381 https://doi.org/10.12011/1000-6788-2020-0432-11

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Funding

National Natural Science Foundation of China (71503056, 71873042); National Social Science Foundation of China (19AJY005); China Scholarship Council (201608440100)
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